Smart utility meters are generally known. In the context of electrical consumption, smart meters have been developed as a mechanism to help match consumption with generation of electricity. Traditional electric meters only measure total consumption and fail to provide any information about when the electricity was consumed. Smart electrical meters provide an economical means for determining when the electricity was consumed thereby allowing governmental price setting organizations to set prices for consumption based upon the time of day and season.
Electrical loading usually peaks at certain predictable times of the day and season. For example, higher prices may be imposed at the start of the work day or on hot summer days when the air conditioning loading is very high. In these cases, a local electric utility may not have enough low-cost generating capacity. Prices can rise significantly during these periods both for the electric utility and consumer as more expensive sources of power are brought on-line or power is purchased from other regions with excess capacity.
In addition to pricing based upon time of day, it has also become possible for utilities to offer price reductions where consumers are willing to reduce consumption during peak periods. For example, some utilities provide automatic control systems for homes that allow the utility to temporarily deactivate heavy loads (e.g., air conditioning) for short periods.
The communication infrastructure that allows for the operation of smart meters in these cases opens up the opportunity for new ways of adding value to utility services. Accordingly, a need exists for better ways of using smart meters.